How to Reduce Risks when Outsourcing IT

by: Arline Ramirez

Tuesday, March 05, 2013

Category: Outsourcing Research / Trends

Australian small and medium businesses have become adept at outsourcing tasks such as HR, customer service, and web design. However, risks don't go along with outsourced services. SMEs need to ensure that offshore service providers have adequate insurance protection.

Before outsourcing IT services to the Philippines and other prime destinations, TechInsurance recommends SMEs to ask these crucial questions:

Does the service provider have the capability to scale IT services as the SME grows?
Small businesses need a lasting partnership in order to expand efficiently. Preparing and transitioning into outsourcing take time and effort. Changing vendors and processes can significantly interrupt business.

Does the service provider have redundant capabilities?
It's not wise to leave all your eggs in one basket. If a single data centre is wiped out by a natural disaster or storage networks are infiltrated by a hacker, SMEs stand to lose all their data in one event. SMEs should choose service providers that have redundant capabilities to ensure that they are secure from unpredictable events and potential attacks.

Who is working on the project?
Other tech companies also outsource to freelancers in order to complete projects and lower costs. SMEs should be fully aware of who is responsible for the work so that the right party is held accountable. Apart from outsourcing, offshoring is also another practice by smaller tech firms. In this case, SMEs should consider the risk of security breaches or have measures in place to reduce it. 

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